Brown Brothers Harriman targets European growth

UK - Privately-owned US bank Brown Brothers Harriman says it aims to set up a "direct custody facility" in the UK – as part of a move to boost its presence in Europe.

“We see an opportunity to grow our European assets significantly,” said Douglas Donahue, BBH’s partner in charge of securities services. He said Europe represents 40% of the bank’s revenues but declined to provide a figure.

The move was “all about positioning in the European theatre” Donahue added. BBH’s European partner Andrew Tucker will run the new arm.

Donahue said the decision was prompted by client demands. He declined to say how much the move would cost or how many staff would be added.

"A UK custody capability is another important development in our overall European expansion strategy and it, in particular, reflects our commitment to the UK marketplace," said Tucker in a statement.

"We see tremendous opportunities to provide custody and related services to a select number of clients who we believe will be attracted to our high quality, client-focused approach," Tucker added.

BBH's assets - which are currently held by UK subcustodians - will be transferred into BBH's own nominee. They will then be serviced by the bank itself. National Australia Bank's Clydesdale Bank will provide operational support in the initial stage of the project.

BBH is keen to stress that the move to set up its own custody operation is a strategic one. Tucker said: "I would also like to stress that this is a strategic decision and in no way a reflection of the services we have received over the years from our principal sub-custodian, HSBC."

BBH is one of several custodians rated by R&M Consultants as being in the "second tier" below the very largest operators such State Street, J P Morgan, Bank of New York and Citibank.